What is a Distributor Proposal?
A distributor proposal, also called a distribution proposal, is a document that freelancers and sole proprietors use to propose potential distribution agreements to clients.
In a distribution proposal, the freelancer or business owner creating the document is typically the distributor while the client can either be the supplier or buyer. Goods can be either physical products or digital ones, like software applications.
For example, you can use a distributor proposal to outline your plan to purchase goods from a supplier or to sell goods you’ve already purchased to clients in a specific region, like your city, state, or country.
A distribution proposal is typically sent before a distribution agreement. If the client accepts your proposal, you can provide them with a formal contract to review and sign.
When to Use a Distributor Proposal
As a freelance distributor, you should use a distributor proposal when you:
- Want to distribute goods like products, materials, or software from an international brand to local companies and businesses. For example, if you want to supply local stores with proprietary products that are manufactured and owned by a business in another country.
- Have warehouse space you want to use to store and distribute goods that you don’t have to produce or manufacture.
- Want to approach a potential supplier with a plan to become one of their distributors.
- Want to impress a potential supplier or buyer by approaching them with a professional proposal.
- Have been contacted by a supplier to become a distributor, and you want to outline your prices, services, and processes in a professional package.
Who Should Use a Distributor Proposal?
You should use a distributor proposal if you are:
- A freelancer looking to supply goods or products that are owned and manufactured by another company to businesses within a specific geographic area.
- A warehouse owner with the existing infrastructure and ability to become a distributor for a wholesale business.
- A store or business owner who wants exclusive rights to distribute a particular product to customers in a specific city, state, or country.
- A freelancer or small business owner who wants to distribute license agreements for software applications on behalf of the software developer.
What to Include in a Distributor Proposal
A distributor proposal should include a variety of different elements that help you to communicate your worth as a distributor to a potential client. While it may vary on the type of distributor you are and the products you will be selling, most distributor proposals include the following sections.
1. Information about each party
That means details about you and the potential customer, such as:
- Full names and business or organization names
- Contact information, including work email addresses and phone numbers
- Job titles, if relevant
2. Product information
Many wholesalers and suppliers produce and manufacture multiple products. In your distributor proposal, be sure to specify which products you want to supply and how many you will need, as well as a potential delivery schedule and transportation details.
To come up with an accurate estimate, you’ll need to do some research beforehand, which may include speaking to potential buyers, conducting a market analysis, and meeting with distributors from other regions. Keep in mind that many suppliers will require a minimum investment amount or minimum order quantity.
Try to make this section as clear and accurate as possible. Don’t just throw in random numbers. Instead, base your estimates on real projections.
If you have one, consider including your business plan with your distributor proposal, especially if you’re a new distributor trying to convince a big brand to work with you. It can help to back up your numbers with a marketing strategy, competitor analysis, customer research, and more.
3. A marketing plan
If you don’t have a business plan to include, or it’s not relevant for this proposal, you should include a section that highlights how you plan to market and advertise the supplier’s product. You should mention:
- Whether or not you have a storefront
- Who your customers are or will be
- How you will advertise the product (digital ads, signage, promotions, etc.)
- How the item will be packaged (if it will be different from how it is received)
- How you plan to deliver products to buyers (mail, storefront only, or in-person)
- Which methods you will use to contact potential clients and customers
Make sure that you plan out your marketing strategies in detail so that if a supplier has questions after you submit your proposal, you can answer them quickly and confidently.
4. Your experience as a distributor
Suppliers want to work with professionals who they feel confident will be able to sell their products. In this section, you need to cover information like:
- How much experience you have working as a distributor
- Whether you have experience selling a similar product
- If you’ve worked with a comparable company in the past
When possible, include numbers to back up your claims. For example, include details related to past sales, profits, and costs, like how many products you sold and how much you made in a given timeframe. You can also highlight any particularly successful marketing campaigns you’ve led.
This section is a great place to reference what sets you apart from other distributors, too. For example, do you provide stellar customer service to your customers, or do you offer other complementary services that fit well with the product? Make sure to speak to how your business or company stands out and why you’re the best choice for the supplier.
5. What type of relationship you want
In the wholesale distribution world, you’ll typically be choosing from one of three types of professional arrangements: wholesale distribution, exclusive rights, or developer distribution.
Wholesale distribution means that you plan to purchase products in bulk at a discounted rate. In some cases, you may become the owner of the products, allowing you to set prices, offer discounts, or and sell product to whoever you like. Wholesale distribution requires storage space as well as a large initial investment.
Exclusive rights can mean that you want to be the only distributor for a specific product in a given area, like a city, county, or state. Or, they can mean that a certain distributor can only sell products to certain customers. For example, a supplier may grant you exclusive distribution rights to specific retailers.
Developer distribution refers to software and intellectual property. Often, a developer will grant a distributor the right to distribute software licenses to clients and customers. In this case, the developer is the supplier. For example, if a company were to create a software application specific to a certain industry and you wanted to sell licenses to use the application to customers.
All suppliers are different when it comes to financing and payment. Wholesalers will expect payment upfront, while software development companies or suppliers that offer exclusive rights may only request payment after a sale is made.
Be sure to review how the supplier you want to work with typically handles payments, and who is responsible for paying who. For example, you may be required to collect payment from customers and then submit a monthly check to a supplier. Or, they may collect payment from all sales (think software licenses) and send you a check each month instead.
How to Write a Distributor Proposal
Writing a distributor proposal doesn’t have to be complicated. Following these steps will help you to keeps your professional and relevant while impressing potential suppliers.
1. Research your supplier
Before you do anything, you need to get as much information about your supplier as possible. Review their website, reach out to their distribution manager, and talk to other distributors if you can.
Don’t submit a distributor proposal until you know:
- What kind of distributors they typically work with and if they’re looking for more
- What the minimum investment or order amount is
- What the distributor approval process looks like on their end
- What time, space, and financial commitments are expected of you
- What you need to include in your application (like a business plan)
The more you know about what a supplier is looking for, the better your chances will be of becoming one of their distributors. Find out as much as you can before sending in your distribution proposal.
2. Gather important information
Take some time to review and gather information that may be important to your proposal, such as relevant sales data, your previous experience, and impressive goals that you’ve reached. Don’t just write your distributor proposal on a whim, spend time preparing it advance so that you stand the best chance of meeting success.
Review your competitors, reflect on your experience, and research demand in your area.
3. Determine your strategy
If you don’t have a plan for how you want to purchase, store, and distribute products, you’ll have a hard time convincing a supplier to work with you. Make sure that you have the time, space, and finances to support your endeavor and that you have a solid idea of how you will be successful.
For example, if you plan to purchase bulk products or materials, where will you store them and who will you sell them to? What’s the lowest price you can sell the items for while still turning a profit, and how much will it cost you to buy, store, and deliver them?
You should know exactly where you plan to sell product, who your most likely customers are, and how you will reach them. Not only will this ensure you get started on the right foot, it will also help suppliers to feel confident in your abilities.
Creating a Distributor Proposal Template is Simple with Bonsai
When it comes to making a distributor proposal template, Bonsai makes it easy for you to create and customize one that’s sure to impress suppliers. All you have to do is add your information to a ready-to-use template, review it, and you’re done.
As an added bonus, Bonsai will even send your distribution proposal to clients to review and accept, taking care of the administrative footwork for you.
Distributor Proposal FAQs
Can I only use a distribution proposal for physical products?
No, you can use a distribution proposal for both physical and digital products. While it is more common for distributors to sell physical products, some suppliers do use distributors to sell licenses to their software applications. This is more common with highly technical or industry-specific software that may require additional assistance to set up or customize.
How do I ask for a distributorship?
Different suppliers will have different requirements when it comes to who they use as a supplier. Review the supplier section of their website (if they have one), or get in touch with whoever handles supplier relationships at their company.
Before submitting a proposal or application, make sure that you have addressed all the required fields and that you meet all of the minimum requirements. Some suppliers will have more strict guidelines than others.
Who can be a distributor?
Technically, anyone can be a distributor, but some suppliers have specific requirements when it comes to who they will work with. For example, some suppliers may only accept wholesale purchases while others will require that you have a storefront. Make sure that you reach out to suppliers that are a match for your freelance distribution business and goals so that you don’t waste time contacting those who aren’t a fit.
- Freelance Contract: Use this template to create a distribution agreement after your proposal is accepted.